Planning for Incapacity FAQs

Posted On March 11, 2024

Facing the possibility of incapacity can be daunting, but being prepared is essential for protecting your family and your wishes. Our “Planning for Incapacity FAQs” provides clear answers to guide you through this complex area of estate planning. For tailored advice, contact New York Legacy Lawyers at (718) 713-8080, our dedicated team of New York estate planning lawyers is ready to assist you in planning for your future.

What is a Durable Power of Attorney?

A Durable Power of Attorney is a document that empowers another individual to carry on your financial affairs in the event you become disabled or incapacitated. Without a Durable Power of Attorney, it may be necessary for one of your loved ones, including your wife or adult child to petition a court to be appointed guardian or conservator in order to make decisions for you when you are incapacitated.  This guardianship process is time-consuming, expensive, often costing thousands of dollars and it can be emotionally draining for your family.

There are generally two types of durable powers of attorney: a present Durable Power of Attorney in which the power is immediately transferred to your attorney in fact; and a springing or future Durable Power of Attorney that only comes into effect upon your subsequent disability as determined by your doctor.  When you appoint another individual to make financial decisions on your behalf, that individual is called an agent or attorney in fact. Most people choose their spouse or domestic partner, a trusted family member, or a friend.

Who can establish a Power of Attorney?

Generally, any individual over the age of majority and who is legally competent can establish a Power of Attorney.

What Constitutes Incapacity?

Incapacity refers to a person’s inability to manage their personal needs or property due to a significant impairment in understanding or appreciating the nature and consequences of their actions. This concept is crucial in legal contexts, as it determines when a person may require a guardian or an agent to make decisions on their behalf.

Under New York Mental Hygiene Law (MHL) § 81.02(b), incapacity must be established through “clear and convincing evidence.” The law specifies that harm is likely if a person cannot provide for their personal needs or manage their property and does not grasp the implications of such incapabilities. To make a judicial determination of incapacity in guardianship cases, § 81.02(c) of the MHL emphasizes assessing the individual’s functional level and limitations. This includes evaluating their ability to perform daily activities, their understanding of their limitations, their personal wishes, and their capability to handle financial matters.

In healthcare scenarios, incapacity comes into play when someone cannot make medical decisions for themselves. In such cases, the New York Health Care Proxy empowers a designated Agent to make decisions when the individual is deemed unable to do so. This determination requires the confirmation of incapacity by two physicians for the Agent’s authority to be recognized.

The determination of incapacity is thus a multifaceted process that considers the person’s mental and functional abilities, with legal thresholds ensuring that the decision to appoint a guardian or an agent is made with due diligence and respect for the individual’s autonomy and well-being.

Who may act as an agent under a Power of Attorney?

In general, an agent, or attorney in fact, may be anyone who is legally competent and over the age of majority. Most individuals select a close family member such as a spouse, sibling, or adult child, but any person such as a friend or a professional with an outstanding reputation for honesty would be ideal. You may appoint multiple agents to serve either simultaneously or separately. Appointing more than one agent to serve simultaneously can be problematic because if any one of the agents is unavailable to sign, action may be delayed. Confusion and disagreement between simultaneous agents can also lead to inaction. Therefore, it is usually more prudent to appoint one individual as the primary agent and nominate additional individuals to serve as alternate agents if your first choice is unwilling or unable to serve.

Aspect Details
Definition A Durable Power of Attorney allows another individual to manage your financial affairs if you become disabled or incapacitated, avoiding the need for court-appointed guardianship, which can be time-consuming and costly.
Types Present Durable Power of Attorney: Immediate transfer of power to the attorney in fact. Springing or Future Durable Power of Attorney: Comes into effect upon subsequent disability as determined by a doctor.
Who can establish a Power of Attorney? Any individual over the age of majority and legally competent can establish a Power of Attorney.
Who may act as an agent under a POA? Any individual legally competent and over the age of majority. Common choices include spouses, siblings, adult children, trusted friends, or professionals with a reputation for honesty. Multiple agents can be appointed but may lead to delays or confusion.

What is a Durable Power of Attorney for Health Care?

The law allows you to appoint someone to decide about medical treatment options if you lose the ability to decide for yourself. You can do this by using a “Durable Power of Attorney for Health Care” or Health Care Proxy where you designate the person or persons to make such decisions on your behalf. You can allow your healthcare agent to decide about all healthcare or only about certain treatments. You may also give your agent instructions that he or she has to follow. Your agent can then make sure that healthcare professionals follow your wishes and can decide how your wishes apply as your medical condition changes. Hospitals, doctors, and other healthcare providers must follow your agent’s decisions as if they were your own.

What is a Living Will?

A Living Will informs others of your preferred medical treatment should you become permanently unconscious, terminally ill, or otherwise unable to make or communicate decisions regarding treatment. In conjunction with other estate planning tools, it can bring peace of mind and security while avoiding unnecessary expense and delay in the event of future incapacity.

What is a HIPAA Authorization?

Some medical providers have refused to release information, even to spouses and adult children authorized by the Healthcare Power of Attorney on the grounds that the 1996 Health Insurance Portability and Accountability Act, or HIPAA, prohibits such releases. Therefore, as part of your incapacity planning, you should sign a HIPAA authorization form that allows the release of medical information to your agents, successor trustees, family, or any other individuals you wish to designate.

For further assistance or to address any additional concerns, please don’t hesitate to contact New York Legacy Lawyers at (718) 713-8080. We’re here to support you in securing your future and ensuring your wishes are respected.